NFU fears changes favour grain firms over farmers

Chief commissioner addressed concerns that the Western Standards Committee could be stacked to the detriment of grain growers

The National Farmers Union says Bill C-48 would eliminate the Canadian Grain Commission’s ability to put farmers’ interests ahead of multibillion-dollar grain companies.

The bill, dubbed the Modernization of Canada’s Grain Industry Act, was tabled in Parliament Dec. 9.

One major aspect of the bill is that it changes the commission’s mandate from acting in the interest of grain producers to acting in the interests of Canadians and grain producers.

Terry Boehm, chair of the NFU’s seed and trade committee, said it sounds like a subtle difference, but it isn’t.

“It will ultimately destroy the rationale and the purpose of the grain commission because grain companies, railways, et cetera, will be in that all Canadians category,” he said.

“When you change that mandate, that institution ultimately will be-come dominated by the very interests that would exploit farmers.”

Elwin Hermanson, chief commissioner of the CGC, said the change is being made to better reflect the reality that the commission deals with a variety of stakeholders and has to be impartial and arm’s-length in those dealings, such as when it is settling grade or dockage disputes.

“Nobody expects us to grade in favour of a producer, but there has been allegations in the past that we would take the producer’s side be-cause of the way the act is constructed,” he said.

Hermanson said Bill C-48 strengthens another provision in the act, directing the commission to provide protection and support to producers.

“While it says we have a mandate to serve Canadians, it also points out that we have some special responsibility to serve producers,” he said.

Another bone of contention for the NFU is that the bill opens the door to political interference at the commission because it gives the federal agriculture minister the ability to appoint and dismiss members of the western and eastern standards committees.

Boehm worries Bill C-48 makes it possible for a minister who is co-opted by grain companies to stack the committees in such a way that top grades become impossible to achieve.

Hermanson said the current act allows the commission to make appointments, but they are subject to approval of the minister.

“Rather than going through that charade, the act just basically now states that the minister is responsible to make the appointment and he would do that on the recommendation of the CGC,” he said.

Hermanson said there is no way committees can be stacked against producers because of the way they are comprised.

For instance, the Western Standards Committee has 12 producer representatives, three exporters and three grain handlers.

The proposed legislation would also allow the commission to establish and administer a fund to augment an insurance-based producer payment protection program.

The program would be easier to administer and cheaper than the current system, which requires licensees to take out financial instruments that combined tie up about $1 billion in grain industry capital.

Hermanson said most bankruptcies in the grain industry result in less than $1 million in unpaid liabilities. The fund would be used to pay out those small amounts, reducing the premiums required to protect farmers against large failures.

The NFU worries small companies would have higher insurance premiums than large companies under the insurance based scheme because they are at a higher risk for non-payment.

It also believes there would be an increased risk under an insurance system, of farmers receiving only partial coverage when a company goes out of business.

Some industry observers have speculated that the federal government does not have time to pass the legislation in Parliament before the fall election.

Hermanson said he has seen Parliament pass bills in one day, but the track record on previous legislation to modernize the commission hasn’t been good with four failed attempts.

He said Bill C-48 is not a contentious piece of legislation. There is no proposal to get rid of the producer payment security program altogether like there was in some of the previous bills.

However, he worries that the bill isn’t high enough on the government’s agenda because it does not have coast-to-coast appeal.

“The clock is ticking and the further we go into May without any debate, the less likely the bill will pass before the House rises,” said Hermanson.

Boehm said he would be surprised if the bill dies on the order paper.

“This Conservative government seems to be very good at pushing bills through as they choose,” he said.

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